AB 1100 - Intro to Agribusiness (Vaporakis)

Demographics are facts about certain groups. This data is useful to develop a basic profile of your consumer.

• age
• ethnicity
• education level
• gender
• income
• location
• marital/family status
• occupation

Psychographics are things more commonly referred to as "culture." Popular psychographic groups would include Baby Boomers or Millenials. Psychographics data is helpful to develop a clearer profile of your consumer.

• attitude
• behavior
• interests/hobbies
• lifestyle
• personality
• values

The goal here is to identify and analyze trends in your industry. Do you expect continued growth in your area? Is it time to adjust your product to meet new needs? These are all things you determine at this stage in the process.

Most businesses aim for around 1% of their potential market in their first 2-3 years. Now that you have determined who your potential market is and how many potential clients exist, answer the following questions:

1. Who has the need for my products or services, the financial ability to purchase my products, and the ability to find my products?
2. How many of these people or businesses exist today?
3. How much money does each person or business currently spend every year solving the problem that my product or service also solves?
4. Who else do I share this market with?

Now you need to decide if you can realistically have 1% of the market and if this will be profitable.

Here is an example from How Big is your Potential Market, Really? from bplans.com. 

A small business example

Let’s use a hair salon in a small city (population: 120,000 people).

First, a few things to know about this hair salon:

• It’s providing high-end salon services
• Average haircut and style is $65
• Majority of clients are women between the ages of 25 and 55

Image from LivePlan “Pitch” section for a beauty salon.

Let’s do the math:

(35,000 x $450) = $15,750,000

This means that this hair salon in this city has a total addressable market size of $15.75M and 35K potential prospects.

This salon also needs to keep in mind that there are three other salons in their community that are seeking to serve this same market, because that means that their TAM will be shared with their competitors.

RefWorks is a new way to collect, manage, and organize research.  You can read, annotate, organize, and cite your research as well as collaborate by sharing collections.

From simple bibliographies to papers formatted with in-text citations or footnotes, RefWorks handles it all. ​To learn more about RefWorks, use our RefWorks research guide.